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Seacrets Alleges Trademark Infringement In Civil Suit

OCEAN CITY — After years of claims, counterclaims and pre-trial motions, the multi-million dollar trademark infringement civil trial between a popular Ocean City nightclub complex and a corporation and its subsidiaries began in earnest this week.

The suit involves O.C. Seacrets, the corporation that owns and operates the popular Seacrets nightclub and restaurant complex over the three-block section of the bayfront in Ocean City, and the Coryn Corporation and its subsidiaries, which has since opened nine resort destinations in Jamaica, Mexico and the Dominican Republic operating under the name “Secrets.”

O.C. Seacrets is claiming the Coryn group’s use of “Secrets” is infringing on its trademark and goodwill and creating confusion for consumers.

While the exact amount being sought by O.C. Seacrets is not entirely clear, it is likely several million dollars, and a source close to the situation said this week the final total could approach $100 million if O.C. Seacrets is successful in the case. O.C. Seacrets is seeking all of the profits Coryn and its subsidiaries derived from the use of “Secrets” and is asking the award be tripled. In addition, O.C. Seacrets is seeking all damages it sustained as a result of Coryn’s trademark infringement and unfair competition and is asking that those damages be tripled as well.

In October 1997, O.C. Seacrets successfully registered the trademark “Seacrets” for “restaurant and bar services” at its location along the bay at 49th Street. Over the years, the restaurant and nightclub complex expanded to a three-block area including several bars, restaurants, a nightclub, a hotel, condominiums and its own radio station. According to court documents, the complex draws between 4,000 and 6,000 guests each weekend during the summer season.

In June 2000, Coryn filed an intent-to-use application for the trademark “Secrets” for “resort hotel services” with the U.S. Patent and Trademark Office, which officially registered the “Secrets” mark for Coryn in October 2003. In January 2004, O.C. Seacrets petitioned the patent office’s Trademark Trial and Appeals Board (TTAB) to cancel Coryn’s “Secrets” mark, arguing that its own mark “Seacrets” covered services closely related to if not identical to “resort hotel services” and there was a likelihood of confusion between the marks.

In August 2008, the TTAB ordered the cancellation of Coryn’s registration because O.C. Seacrets had a priority of usage in its Seacrets mark and there was a likelihood of confusion between the marks. The TTAB also denied Coryn’s petition for partial cancellation or restriction because it found the proposed restriction would not avoid confusion.

In October 2008, Coryn appealed the TTAB’s decision to the U.S. District Court.

In December 2008, O.C. Seacrets counterclaimed for trademark infringement and unfair competition under the Lanham Act and Maryland common law. After several claims and counterclaims, the jury trial finally began on Monday in U.S. District Court in Baltimore with opening statements and early testimony and entered its fourth day on Thursday.

According to the opinion of a U.S. District Court judge on a pre-trial motion to determine who is the plaintiff and who is the defendant in terms of who proceeds first in presenting its case, the burden of proof is on O.C. Seacrets.

“O.C. Seacrets has sued Coryn for trademark infringement and unfair competition,” court documents read. “To prevail on these claims, O.C. Seacrets must prove it has a valid protectable trademark and the Coryn is infringing on its mark by creating confusion, or a likelihood thereof, by causing mistake or deceiving as to the attributes of its mark.”

For the O.C. Seacrets team, however, the similarities are irrefutable.

“The ‘Secrets’ mark is confusingly similar to the ‘Seacrets’ mark and name in all respects and use of the ‘Secrets’ mark in connection with Coryn, Coryn II, and AMResorts’ goods and services is likely to cause confusion or mistake as to source of origin or services, thereby misleading and/or deceiving consumers,” O.C. Seacrets’ counterclaim reads. “Seacrets, Coryn, Coryn II and AMResorts use their marks in connection with the same types of related goods and services, and such goods and services are sold to the same class of purchasers.”

O.C. Seacrets is claiming the consuming public, on seeing the “Secrets” name on the destination resorts around the Caribbean, will assume it is affiliated with the original “Seacrets” in Ocean City and vice versa.

O.C. Seacrets also claims consumers familiar with the vacation destinations in Jamaica and elsewhere might assume the Ocean City nightclub complex came later.

“The consuming public, on seeing the ‘Secrets’ mark in association with Coryn’s goods and services, is likely to believe, erroneously, that such goods and services originate from or have some connection, affiliation or sponsorship with Seacrets, which they do not,” the counterclaim reads. “Such confusion, or the potential for reverse confusion, is a source of significant harm and damages to Seacrets and its registered mark and name.”